Sunday, November 22, 2009

Crowdsourcing, taxation and the new digital economy

Governments need taxes - need things they can tax - to operate effectively, to have the resources to provide all the services we agree we all need.  But the problem with the new digital economy is that large portions of what is created these days is done voluntarily, out of hours and by people who care more for a cause than the buck they could turn.  Wikipedia exists because of this crowdsourcing effect, and usefully defines the term thus

Now what happens if a government realises that all this voluntary work, all this unauditable activity, imperils its very own future, its very own ability to raise income?  In much the same way as the big content holders - essentially the film, music and publishing industries - feel threatened by the way the opportunities to make money are moving from paid creators to ISPs and search engines, so governments should be worrying quite strategically that what used to be carried out in large office blocks and under the guiding hands of giant corporate bodies is now being developed in people's sitting-rooms and via two-a-penny broadband connections.  Whilst content and intellectual property were created by taxable organisations, so government and content owners had shared and vested interests in maintaining a certain shape to the economy.  But now truly useful software and services are gradually slipping into the hands of the voluntary sector (one simple example being how Microsoft's Encarta finally lost out to the community's Wikipedia), we begin to realise that perhaps our ways should part. 

As end-user/producers, our interests on the one hand and those of government and big business on the other are beginning to go through a process of considerable revision.

So it is that I repeat the question.  What happens if a government realises that the end-user/producer trends of 21st century crowdsourcing mean a creeping reduction of taxable organisations?  I suggest the consequence is what we have today in Britain's Digital Economy bill.  Designed to reinforce existing structures and ownerships over future trends, this is where the interests of the Internet's future creators clash destructively with what has suddenly become a confluence of current needs - needs that the old content producers and government both share: how to raise their income in order to support their enormous structures when people are choosing more and more to do important things without pecuniary payment.

Yes, I know.  This is beginning to make me sound like a small government agitator.  But what really I think I am trying to argue is that both big government and big business need to rethink their approach.  The future is in the grassroots.  And if they want to make money out of the grassroots, then what neither should do is believe that legislating the future back into the restricting bottles of our 20th century genies is the solution.  Both big business and big government need to move along the supply line and find different ways of generating income.  And perhaps requiring less of that income to function effectively.  To, in fact, use the very same trends of crowdsourcing to reduce their own costs and structures and integrate more usefully in the new Internet.

For the solution, most definitely, does not lie in kneejerk reactions such as Peter Mandelson's Digital Economy bill. 

We need to enable the future, not underline the past.

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